Pressure on PM to loosen purse strings threatens to squeeze public finances 26 May 2025 Daily Telegraph Link Sir Keir Starmer risks blowing a £5bn black hole in the public finances after U-turning on benefit cuts in the face of a backbench rebellion. The Prime Minister will cost the Treasury as much as £1.5 billion by bringing back winter fuel payments for most pensioners, while up to £3.5 billion more will be lost if he axes the two-child benefit cap. A planned reduction in net migration could cost the Treasury £7 billion more, according to Britain’s fiscal watchdog. It comes as Rachel Reeves, the Chancellor, braces for another bleak set of forecasts amid speculation that she will be forced to raise taxes in her autumn Budget. Left-wing Labour MPs are clamouring for the Government to loosen the purse strings, with whips seeking to head off a potentially major rebellion. Meanwhile Nigel Farage, the Reform UK leader, will this week attempt to outflank Labour on welfare by cal...